Global stock markets recovered Friday after weeks of meltdown from New York to Toronto to Tokyo. In the United States alone, paper losses amounted to $700 billion.
Governments stepped in with billions of dollars of their own to stem the losses.
The American credit crunch, spurred by the housing market collapse and a global economic slowdown, has left observers wondering how the tech sector will react.
It all hit Nortel like a hammer: the company lost half its stock value this week on news they are being forced to make more cuts.
Nortel issued a warning that revenues will be below last year. Another round of cost-cutting will be necessary. And Metro Ethernet Networks, described as the firm's crown jewel, will be sold off.
Nortel isn't alone in facing the crunch. Dell, Cisco, Cienna, and Alcatel have all warned of slowdowns.
But most of Nortel's competitors (especially Erickson in Sweden, Alcatel in France, Wa Wei in China) have deeper pockets and government support, said Ed Snyder of Charter Market Research in San Francisco, who watches the firm.
When large telecom firms struggle it filters down to companies that supply everything from cellular phones to chip and computer makers. And there are more than a few of those in Ottawa.
The national capital's tech sector has struggled to create sustained growth. The Conference Board of Canada has said Ottawa's 2009 economic outlook is the weakest in a dozen years.
Even so, analysts believe the industry has a strong base and can react well to panics.
